Turning Operational Problems into Profits

You may have experienced this before: There is a problem in your operations, and you suspect that it's costing you a lot of money. You have a general sense of what the issues are, but succinctly defining the problem and finding a solution are difficult due to a variety of deeply rooted and longstanding cultural norms. Over time, you decide to form a team to solve the problem. Initially, there is great energy and participation in the meetings, but the daily workload peaks and attendance at the problem-solving sessions dwindles until the meetings fade away. The problem persists, but everyone works around the constraints, tolerates the inefficiencies and ignores the waste in favor of meeting customer demand.

Sound familiar? You're not alone. According to a 2013 survey of global CEOs by the Conference Board, achieving operational improvements ranked third on a list of the top 10 challenges they face. One problem is that there are never enough hours in the day to perform day-to-day duties while also tackling systemic problems. The challenge becomes how does a management team find the capacity and resources to solve complex problems without disrupting daily operations?

The solution could be utilizing a value accelerator (VA) process, which can be effective for delivering short-term, bottom-line value with limited to no capital investment. A VA takes the best elements of two well-known continuous improvement tools – Six Sigma and kaizen – and combines them into a targeted, two-week, three-step improvement exercise. It is designed to deliver rapid improvements on a broad array of high-value business needs, such as increasing uptime and yield; reducing cycle time, energy consumption and equipment failure; streamlining the supply chain; decreasing set-up and adjustment time as well as start-up losses; eliminating defects and rework; and improving safe work practices.

Although the VA process is relatively short in duration, the benefits can have an enduring impact on your operations and personnel. First, it helps focus attention and make problems more manageable to solve. Often, finding solutions can be perceived as overwhelming to already busy employees, which discourages their participation. A VA contains the scope to one to three focus areas with an emphasis on delivering results using existing capabilities and resources.

It also helps build a collaborative, team-oriented process for addressing operational problems. A VA requires cross-functional engagement from every level of the organization, which effectively optimizes innovation by integrating shop-floor ideas with subject-matter expertise (e.g., process engineering). The result is a bottom-up solution that benefits from full site involvement. In addition, because teams are "learning by doing," it develops internal problem-solving capability to successfully address future challenges.

Finally, a VA is a good tool for arriving at quick decisions when multiple solutions are in play. It is also a results-driven, performance-based and execution-focused process that typically arrives at a combination of process, culture-change and technology-based solutions.

Of course, not every problem is an ideal candidate for deploying a VA in your operations. Before doing so, companies should ask themselves certain questions to increase their probability of success. For example, is six to nine months a reasonable time for implementation of solutions? Will the solutions likely require little or no capital? Is there a definable pre-tax operating income (PTOI) benefit of $250,000 or more? These are important parameters for a VA process to be truly effective.

Also, questions about staffing and scope can help define the utility of a VA. Will the problem-solving process and implementation of solutions require the engagement and involvement of a multi-functional team (manufacturing, supply chain, engineering, quality, etc.)? Are there several possible solutions to the problem and a lack of consensus among stakeholders for the right one to implement? Have you tried other processes and failed? If the answer to these questions is "yes," deploying a VA could be beneficial.

Finally, don't hesitate to seek help. While a VA could benefit many organizations, its probability of success can greatly increase when it is led by a seasoned facilitator who possesses a deep understanding of operations, technology and operational excellence. Often, an outside facilitator can serve as an additional resource on the project team, provide an objective set of expert eyes and be a new sounding board for old ideas. A third-party facilitator can also act as a neutral arbitrator for conflicting ideas and drive the overall effort through a blend of technical and people-oriented skills designed to foster overall team-building and consensus.

Organizations in need of finding a solution to a nagging operational problem in a relatively short amount of time need not feel overwhelmed or frustrated. Pursuing a VA process could be the fast, cost-effective solution they are looking for to not only resolve current challenges but also help build team-oriented skills to quickly address future operational problems.